Benchmarks trade lower amid weakness in global markets

Indian equity benchmarks started the week on pessimistic note, in line with the negative cues from global markets, and extended their losses in early deals on Monday. Markets were trading lower as investors took money off the table amid concerns over the impact of coronavirus on global economy amid weak earnings report on domestic front. Traders were also concerned with rating agency Icra’s statement that the GST compensation fund may see a shortfall of Rs 15,000-25,000 crore for 2019-20, and it pegged the unpaid GST compensation to the states at Rs 60,000-70,000 crore for the October 2019-January 2020 period. Market participants overlooked Union Finance Minister Nirmala Sitharaman’s statement that the Centre, in the Budget 2020, has laid the foundation of increasing consumption while ensuring that the government's investment is deployed to build infrastructure leading to a $5 trillion economy by 2024-25. Besides, foreign investors remained net buyers in Indian capital markets for a sixth straight month in February, putting in a net amount of Rs 5,177 crore mainly in the debt segment in the month so far.

Global cues remained lackluster with all the Asian markets trading in red following the negative cues from Wall Street on Friday and as China's death toll from the coronavirus outbreak exceeded the global total from the SARS epidemic in 2003. China's National Health Commission said that as of Sunday night, the death toll in the mainland China from the coronavirus outbreak has risen to 908, while a total of 40,171 infections were confirmed. Meanwhile, the Ministry of Finance said that Japan posted a current account surplus of 524.0 billion yen in December, up 12.8 percent on year.

Back home, the Reserve Bank of India (RBI) will begin the first tranche of its long-term repo operations on February 17 with three-year repo of Rs 25,000 crore, followed by another on February 24 for an equal amount. In stock specific developments, Tata Steel was the top loser on the Sensex, after the company reported a consolidated net loss of Rs 1,228.53 crore for the quarter ended on December 2019. It had posted a consolidated net profit of Rs 1,753.07 crore during the same quarter a year ago. Mahindra & Mahindra fell on reporting 84.74% fall in consolidated net profit to Rs 199.94 crore in Q3 December 2019 over Q3 December 2018.

The BSE Sensex is currently trading at 40991.22, down by 150.63 points or 0.37% after trading in a range of 40944.64 and 41172.06. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.34%, while Small cap index was down by 0.14%.

The top losing sectoral indices on the BSE were Metal down by 1.99%, Consumer Durables down by 0.91%, Auto down by 0.83%, Utilities down by 0.66% and Energy was down by 0.65%, while there were no gainer on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 0.82%, Bajaj Finance up by 0.68%, Bajaj Auto up by 0.51%, SBI up by 0.28% and Hero MotoCorp up by 0.19%. On the flip side, Tata Steel down by 4.60%, Mahindra & Mahindra down by 3.16%, ONGC down by 2.42%, NTPC down by 1.38% and Indusind Bank down by 1.17% were the top losers.

Meanwhile, expressing optimism over India’s economic growth and achieving $5 trillion economy target, Union Finance Minister Nirmala Sitharaman stated that the Centre, in the Budget 2020, has laid the foundation of increasing consumption while ensuring that the government's investment is deployed to build infrastructure leading to a $5 trillion economy by 2024-25. She also pitched for rationalisation of Goods and Services Tax (GST) rates once a year and not every three months as was the trend so far.

Sitharaman said ‘I think we have laid the foundation for increasing consumption, ensuring that capex (capital expenditure) and government's investments will go towards spending on building of assets in infrastructure which should have cascading effects both in the short term and in the long term’. In order to address rural distress, she said 16 focused action points have been announced in the budget. So, she expects all this will lead to a five trillion dollar economy.

The Finance Minister further said ‘I am looking at the point of macroeconomic stability, building assets in the country, money directly going to hands of individuals because of reduced tax rates and so on.’ She added that announcements were made in the Budget about various projects which are happening in different states.
The CNX Nifty is currently trading at 12046.95, down by 51.40 points or 0.42% after trading in a range of 12035.55 and 12103.55. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were UPL up by 4.24%, Bharti Infratel up by 0.87%, Cipla up by 0.86%, ICICI Bank up by 0.80% and Yes Bank up by 0.78%. On the flip side, Tata Steel down by 4.61%, Zee Entertainment down by 3.94%, Mahindra & Mahindra down by 3.26%, ONGC down by 2.38% and Coal India down by 2.00% were the top losers.

All Asian markets were trading lower, Shanghai Composite declined 11.33 points or 0.39% to 2,864.63, KOSPI fell 15.34 points or 0.69% to 2,196.61, Straits Times trembled 17.72 points or 0.56% to 3,163.76, Jakarta Composite lost 45.05 points or 0.75% to 5,954.56, Taiwan Weighted dropped 46.53 points or 0.4% to 11,566.28, Nikkei 225 slipped 130.62 points or 0.55% to 23,697.36 and Hang Seng was down by 211.10 points or 0.77% to 27,193.17.